Title: Regina Edillon vs Manila Bankers Life Insurance Corporation

Topic: Waiver and Estoppel

Facts:
Sometime in April 1969, Carmen O. Lapuz applied with respondent insurance corporation for
insurance coverage against accident and injuries. She filled up the blank application form given to her
and filed the same with the respondent insurance corporation. In the said application form which was
dated April 15, 1969, she gave the date of her birth as July 11, 1904. On the same date, she paid the
sum of P20.00 representing the premium for which she was issued the corresponding receipt signed by
an authorized agent of the respondent insurance corporation. ( Rollo , p. 27.) Upon the filing of said
application and the payment of the premium on the policy applied for, the respondent insurance
corporation issued to Carmen O. Lapuz its Certificate of Insurance No. 128866. ( Rollo , p. 28.) The
policy was to be effective for a period of 90 days.

On May 31, 1969 or during the effectivity of Certificate of Insurance No. 12886, Carmen O. Lapuz
died in a vehicular accident in the North Diversion Road.

On June 7, 1969, petitioner Regina L. Edillon, a sister of the insured and who was the named
beneficiary in the policy, filed her claim for the proceeds of the insurance, submitting all the necessary
papers and other requisites with the private respondent. Her claim having been denied, Regina L.
Edillon instituted this action in the Court of First Instance of Rizal on August 27, 1969.

In resisting the claim of the petitioner, the respondent insurance corporation relies on a provision
contained in the Certificate of Insurance, excluding its liability to pay claims under the policy in behalf
of "persons who are under the age of sixteen (16) years of age or over the age of sixty (60) years x x x."
It is pointed out that the insured being over sixty (60) years of age when she applied for the insurance
coverage, the policy was null and void, and no risk on the part of the respondent insurance corporation
had arisen therefrom.

The trial court ruled in favor of the private respondents, stating that a contract of insurance is a contract
of adhesion and it was the duty of the insured to know the terms of the contracts he or she is entering
into.

Issue:
Whether or not the acceptance by the private respondent Manila Bankers of the premium and issuance
of the corresponding certificate of insurance served as a waiver or put them in estoppel.

Ruling:
Yes. It was held that acceptance by insurance corporation of the premium and issuance of
corresponding certificate of insurance in favor of the insured was deemed a waiver of the exclusionary
condition of overage stated in said certificate of insurance.

In the case at bar, the petitioner did not conceal her age. Despite the condition in the insurance
coverage which was already in printed form, the private respondents continued to receive premium
payments and issued the corresponding certificate of insurance. The insurance company had a
sufficient time to process the application and to notify that the applicant was over 60 years of age,
hence, it could still cancel the policy. However, the insurance company were deemed to be in estoppel
due to its inaction.